Introducing GSM-enabled Pay-As-You-Go solar in Cambodia

Introducing GSM-enabled Pay-As-You-Go solar in Cambodia

• 1.
  Introducing GSM-Enabled PAYGO Solar in Cambodia Dr.Benoit Lacroix 09/06/2016
• 2.
  The Cambodian Context Only34% of households have grid connection Most households use car batteries to power appliances
• 3.
  Who Is Kamworks? •A social business established in 2006 • That designs and assembles solar products locally • With a strong innovation mindset
• 4.
  Kamworks’ Main Products MoonLightSolar Lanterns (12,000 units sold) Solar Home Systems (12,500 units sold) Large Solar Systems
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  Kamworks PAYGO SolarSystems 1. Experiment new business models — Rental and credit sales, with internal financing — Collect payments using mobile money 2. Develop a pay-as-you-go solar home system — Integrated in existing products — Enforce repayments and remote monitoring 3. Objectives — Initial target: 300 GSM-enabled SHS in customer hands — 505 units installed in November 2015
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  Commercial Offers Option 1: Rental •Perpetuity rental • Low cost • $20 per month for a 100W SHS Option 2: Lease-to-own • 2 years loan • $35 per month for a 100W SHS
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  GSM-Enabled SHS • Availablesizes — 100W, 60W and 40W • Retrofitted existing SHS with GSM connection — Control the product, for better payment compliance — Monitor the product, for better and more cost effective service
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  The customer payswith his/her mobile using Wing. How Does It Work? Kamworks manages payments using its cloud-based billing and management system. Kamworks remotely monitors the solar systems and switch them using GSM technology.
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  Lesson #1 Try, Trust,Buy • Customers want to own — Big investment — Require building trust • Option: switch from rent to rent- to-own — 65% of customers initially rented — Within 1 year, 45% had transitioned to rent-to-own • Rental used as a low-risk, low- commitment way to test SHS
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  Lesson #2 Customers LikeMobile Money • Standard use of mobile money: send money to relatives • Switching to bill pay was low pain — Required some training of the shops — Very good collaboration with WING • 95% of customers prefer using mobile money than using battery charging services
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  Lesson #3 Financing ThroughCrowdfunding • Partnership with the crowdfunding platform Kiva • Low-cost funding for the company and the customer • Phasing of the due diligence of KIVA in stages is very helpful
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  Lesson #4 In Cambodia,the Bigger the Better • Customers prefer the large systems — 75% chose the SHS100 • Triggers purchase of appliances — 50% of customers — Flat screen TVs and fans
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  Lesson #5 Customers PayLate • Excellent initial repayment rates • Challenge to maintain long term on-time repayments — Easy fall-back to previous solution — Hard recovery when issue • Work-in-progress — Dedicated credit department — Much stricter rules — PAR30=0 for all SHS installed in 2016
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  • Mobile networkoperator: — Initially focused on connectivity — After 1 year of collaboration, moved to reduced pricing and co- branding of the product • Microfinance institutions — Partnerships with Vision Fund and HKL — On-the-ground knowledge and trust of customers — Challenge to align priorities and incentivize field agents Lesson #6 Partnerships Take Time To Develop
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  Lesson #7 Machine-To-Machine IsKey • M2M monitoring very promising — Used for remote troubleshooting — Moving to predictive maintenance, automated troubleshooting and customer analysis • M2M control challenging — Network coverage issues — Part of the problem on repayments rate • Next version — Keep M2M for monitoring — Keypad + activation code for control SHS GSM connection status
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  The Next Steps •Accelerate SHS sales in Cambodia — Kamworks certified supplier for solar loans financed by the French Development Agency’s — Next version of the product supported by the Cleanstart SHIFT Challenge Fund of UNCDF • Kamworks as a PAYGO solutions provider 1. Hardware with remote monitoring and switch off 2. Cloud based platform to collect and manage payments 3. ERP system to manage sales and operations
• 17.
  Thank you! [email protected]